Nonlinearity

The assumption that E(ε) is everywhere 0 implies that the specified regression surface captures the dependency of the conditional mean of y on the xs. Violating the assumption of linearity—broadly construed to mean a departure from the specified functional form of the regression model—therefore implies that the model fails to represent the systematic pattern of relationship between the average response and the explanatory variables. For example, a partial ...

  • Loading...
locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles